We SWIPE to WEEP

Recent “tentative” deal between the credit card companies and Justice department wherein credit card companies settled with justice department and agreed to lower charges towards swipe fee they charge their customers, has me thinking – the credit card companies made $35 Billion last year on charge fee alone, the government in turn has called a foul play and filed a antitrust suite where in it made settlement with two of the three major CC companies( Visa and Master have settled Amex is going to appeal). Leaving the customer (businesses here) to come in terms to live with the past charges and payments, in hopes of lower charges moving forward.

I remember my dry cleaner cringing every time I wanted to pay using my Cards – I had no knowledge that the charges to him were this outrageous! This settlement doesn’t help the hard working working-class that has worked so hard to keep this economy going only to be looted by the CC companies. It’s true that the CC companies get to, for lack of better word, F*** not only the consumer who holds their card through outrageous policies and APR’s but it does the same to every shop owner/business that accepts CC’s through swipe fees. These companies have bilked the economy and grown so huge that it’s outrageous what they have achieved in the name of easy credit at the expense of every citizen’s hard earned money!

Wouldn’t a better settlement have been for the CC companies to revert certain percentage of the past charges back to the businesses? Most of the small and medium business request payment in cash if the transaction is below certain $ amount – as they were not able to accommodate for the swipe charges. The swipe charges are not straight forward they are again based on risk and tie up to the rewards program(of each individual card holder) and what not, hence a business would not incur the same swipe charge if I were to swipe my Master card for $40 and XYZ where to swipe his for the same amount!!

The irony is except for the ones who (shop owners/business owners) actually paid in this whole ball game – rather burnt his pockets, everyone one else including the government is keen to only having the slice of the pie. All the while the Gov has put up a show for having been “actively” and “genuinely” looking for the benefits of the common man.

Kudos to the lobbyist who help CC companies gain foot hold in policy making, having made billions by making credit easy only to have the consumer at gun point to fork out all his saving/earnings to accommodate for killer APR’s which balloon at alarming rate. If that was not enough they turn around and have the businesses by their balls to fork out swipe fees every time a card is used.

The thing to loath with CC’s is not that credit is available easily or that APR’s are involved – on a more sanguine note: the CC companies changed the complete psyche of the latest two generation towards easy money, swipe now pay later has become the mantra of X,Y and Z generations. We are so dependent on CC’s today that it’s hard to believe that two generation ago our grand fathers spent/bought only what they could afford and always had money tucked away for rainy day. Today when it rains – all one can think is where to vacation to get away from rain.

If this is progress then maybe we need to digress from it and slow down and not live in the moment but have a plan how to achieve / what to achieve in life and work towards it diligently while always saving for that unexpected “rainy” day. Otherwise CC companies – a better word is LOAN SHARKS – will make our life miserable while living lavishly on our hard earned money which could have been our’s if only we could resist the temptation to swipe!

Your thoughts and comments are most welcome.

Related article in NYTIMES:http://www.nytimes.com/2010/10/05/business/05card.html?_r=1&scp=1&sq=amex%20visa%20master&st=cse